BRUSSELS, Oct 13: The European Commission called on Thursday on the oil industry to plough the bumper profits earned from high oil prices back into investment to boost production and refining capacity.
“Oil prices remain too high. This is hurting EU citizens and business,” EU energy commissioner Andris Piebalgs said in a statement after meeting with senior representatives from the energy industry.
“It is important that oil companies behave in the most responsible manner, as they play an important economic and social role by investing profits resulting from high prices in new production and — where needed — refining capacity,” he added.
Oil companies have largely avoided building costly new refineries since the last wave of investment in the sector two decades ago following the 1970s oil crises.
Energy groups spurned big investments in refining because such outlays were deemed to be unprofitable until the recent jump in crude prices starting several years ago.
As a result, refiners are now struggling to keep up with growing consumer demand, which has helped push prices higher.
Amid dwindling supplies for easy-to-refine light, sweet or low sulphur content crude, analysts have sounded alarm bells about the lack of refining infrastructure in big consuming countries that can handle heavy, sour or high sulphur content crudes that are particularly abundant in Saudi Arabia.
“The present profits of the oil companies resulting from present price levels need to be used as an opportunity to ensure that bottlenecks in refining capacity do not develop in the future,” the commission said in the statement.—AFP
